Your tax guy now sells health insurance

Tax pros are helping customers enroll in Obamacare

JonnelleMarte

Bloomberg

This tax season, Americans sitting down to prepare their returns are not only being asked to tally their income and charitable contributions, but to recall the last time they had a checkup.

This is the only tax filing season—unless the Obama administration changes the enrollment schedule—that will overlap with the open enrollment period for health insurance. Americans have until March 31 to choose a health insurance plan, roughly two weeks before the April 15 deadline for filing tax returns and paying taxes. Aware that the tax code is being used to implement health care reform, some tax preparers are using the overlap as a chance to expand their services beyond tax returns to help consumers make insurance decisions.

For consumers, it’s a chance to knock out two birds with one stone. After taxpayers are done with their returns, H&R Block
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helps them estimate what their premiums would cost if they were to qualify for a premium subsidy tax credit to help lower insurance costs and to calculate how big a penalty they will have to pay if they lack insurance coverage. People who want to shop for insurance are connected with agents from GoHealth LLC, an online insurance broker who can help them compare plans and apply for insurance on HealthCare.gov. The firm is also offering in-person enrollment help through a pilot program being tested in Phoenix. “It looks like the Affordable Care Act will be a net benefit for us,” Bill Cobb, chief executive of H&R Block, told MarketWatch during an interview last month.

People who get their taxes done with Jackson Hewitt Tax Service can get help filling out an application for Medicaid and are given the option of calling a broker at GetInsured, a private health insurance exchange, for help filling out an application on HealthCare.gov. “If you come in and have your taxes done, we will do all of this for you for free,” says Brian Haile, senior vice president for health policy at Jackson Hewitt Tax Service. Jackson Hewitt gets paid a commission or a lead generation fee from the broker when a customer picks a plan. H&R Block gets paid a commission from the health insurance companies when a customer signs up, but plan prices are the same as they would be on public insurance exchanges.

Some of the key provisions of the Affordable Care Act, such as the penalty for people who don’t have coverage and the subsidy to help people afford insurance, will show up more prominently during next year’s filing season when taxpayers are preparing their 2014 returns. That is when those consumers who lack coverage may find the penalty for not having insurance, which starts at $95 or 1% of a person’s household income, subtracted from their tax refunds. And those Americans getting help to pay for their insurance premiums and other out-of-pocket medical costs will have a new credit to claim on their return.

To be sure, some critics argue that brokers may not gear customers to the most cost-efficient plan. Customers need to ask if they are being shown all of the plans available to them and should be clear if they think they may qualify for subsidies and want to apply for an exchange plan, since brokers can also sell off-exchange plans that don’t qualify for federal premium or cost-sharing subsidies.

Still, health reform advocates say involving tax preparers could be a way to boost enrollment. At least 74% of the nearly 26 million uninsured Americans who are likely to qualify this year for programs that can help them afford health insurance file federal income tax returns, according to a report by the Urban Institute Health Policy Center. And since most low-income taxpayers file their taxes with the help of a pro, in-person tax preparers could be important when it comes to helping uninsured Americans enroll in health coverage, authors of the report argued. “I think we need to be imaginative to think about different ways to increase enrollment,” says Katherine Hempstead, who heads coverage work at the Robert Wood Johnson Foundation, the health-care focused philanthropy that funded the report.

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